GOVERNMENT OF INDIA INITIAATIVES
STARTING A BUSINESS IN INDIA
1. Permanent Account Number (PAN), Tax
Deduction & Collection Account Number (TAN), Director Identification Number
(DIN) have now been merged into a single form (SPICe) for company
incorporation.
2. Five-page form and other attachments
for reserving the name of the Company with the Ministry of Corporate Affairs
has been simplified into a simple web service with only three fields to be
filled.
3. Registration under Employee State
Insurance Corporation (ESIC) and Employee Provident Fund Organisation (EPFO)
are available at Shram Suvidha portal as a common online service with no
physical touch point.
4. No requirement of inspection for
before registration under Shops & Establishment Act in Mumbai and Delhi.
5. Companies Act was amended to
eliminate the requirement of a common company seal.
DEALING WITH CONSTRUCTION PERMITS IN INDIA
1. Municipal Corporations of Delhi, as
well as Municipal Corporation of Greater Mumbai, have introduced fast track
approval system for issuing building permits with features such as Common
Application Form (CAF), provision of using digital signature and online
scrutiny of building plans.
2. Delhi has uniform building by-laws
which allow for risk-based classification regimes for different building types.
It has a provision of deemed approval of sanctioning building plans within 30
days.
3. For construction permits, the time
reduced from 128.5 to 99 days in Mumbai and from 157.5 to 91 days in Delhi
between Doing Business 2018 and 2019 reports.
4. Total number of procedures reduced
to 20 in Mumbai and 16 in Delhi.
5. Cost of obtaining construction
permits reduced from 23.2% to 5.4% of the economy’s per capita income.
TRADING ACROSS BORDERS
1.
The Central Board of Excise and
Customs (CBEC) has implemented ‘Indian Customs Single Window Project’ to
facilitate trade. Importers and exporters can electronically lodge their
Customs clearance documents at a single point.
2. The number of mandatory documents
required for customs purposes, for both import and export of goods, has been
reduced to three.
3.
e-Sanchit, an online application
system, allows traders to file all documents electronically.
4.
The electronic self-sealing of the
container at the factory has reduced time and cost for exporting firms.
5.
A computerized risk management
system has brought transparency and reduced frequency of custom inspections
significantly.
6.
Central Board of Indirect Taxes and
Customs has provided a facility for Advance Bill of Entry (Advance Import
Declaration).
ENFORCING CONTRACTS
1. The Commercial Courts and Appellate
Division of High Courts have been established in Mumbai and Delhi.
2. National Judicial Data Grid (NJDG),
provides case data including case registration, cause list, case status and
orders/ judgements of courts district-wise across the country. NJDG is open for
public since 2015.
3.
New cases in district courts are
assigned to Judges randomly through an automated system in Delhi and Mumbai.
4. e-filing of cases has been introduced in district courts of Delhi and Mumbai.
5. A case management tool
has been developed with functionality of sending a notification to lawyers,
viewing court orders/ judgements, tracking the status of cases, to
semi-automatically generate court orders etc.22
GETTING CREDIT
1. Central Registry of Securitization
Asset Reconstruction and Security Interest (CERSAI) is a geographically unified
electronic registry that provides for registration by asset type. Since 2017,
CERSAI also provides search through debtor's name.23
2. Securitization and Reconstruction of
Financial Assets and Enforcement of Security Interest (SARFAESI) (Central
Registry) Rules, 2011 was amended to include additional types of charges,
including a security interest in - immovable property by the mortgage,
hypothecation of plant and machinery, stocks, debt including book debt or
receivables, intangible assets, patent, copyright, trademark,
under-construction building.24
3. The definition of property, which
now includes immovable as well as intangible, allows CERSAI to register these
additional charges.25
GETTING ELECTRICITY
1. Electricity connection is provided
within 7 days if no Right of Way (RoW) is required and within 15 days where RoW
is required.26
2. Service line cum Development charges
is now capped at US$ 357.6 in Delhi.27
3. The number of documents required for
getting electricity connection has been reduced to two and no physical
documents are accepted.28
4. Total number of procedures reduced
to 3 in Delhi and 4 in Mumbai.29
REGISTERING PROPERTY
1. All sub-registrar offices have been
digitized and its records have been integrated with the Land Records
Department, in both Delhi and Mumbai.
2. In Mumbai, all property tax records
have been digitized. Property is mutated automatically after registration.30
The digitization of property records ensures transparency and allows citizens
to ascertain the history of transactions in digital mode.
3. Online service for charges search at
Registrar of Companies reduces the time taken for this procedure
significantly.31
4. Statistics regarding the number of
land disputes at Revenue Courts are available online in both Delhi and
Mumbai.32
RESOLVING INSOLVENCY
1.
The Insolvency and Bankruptcy Code
of 2016 has introduced new dimensions in resolving insolvency in India. It is
India’s first comprehensive legislation on corporate insolvency.33
2.
Under Fast-track Corporate
Insolvency Resolution Process (CIRP) for mid-sized companies, the process for
insolvency shall be completed within 90 days with a maximum grace period of
another 45 days.34
PAYING TAXES
1.
Reduction of corporate tax from 30%
to 25% for mid-sized companies.35
2. Domestic companies can opt for
concessional tax regime @ 22% (effective tax rate: 25.17% inclusive of
surcharge and cess). Such a company cannot claim any income tax incentive or
exemption. Such companies are not liable to pay the Minimum Alternate Tax
(MAT)36
3. The tax rate for new domestic
manufacturing companies is now 15% (17.01% inclusive of surcharge and cess).
Companies that have been incorporated on or after 1st October 2019, making
fresh investment manufacturing and commencing production on or before 31 March
2023, may opt for such concessional tax regime.
Such companies cannot avail of any other income tax exemption/ incentive
under the Income-tax Act.36
4. A company that does not opt for the
above concessional tax regime and avails any tax exemption/ incentive, shall
continue to pay tax at pre-amended rates. However, the option of availing of
the lower tax regime of 22% can be opted for after the expiry of tax the
holiday/ exemption period. Once the same has opted for it cannot be
subsequently withdrawn by the taxpayer. MAT rate for companies availing
exemptions/ incentives reduced from 18.5% to 15%.36
5. Robust IT infrastructure of online
return filing for Indian taxpayers.37
6. The Goods and Service Tax came into
effect from 01 July 2017. It subsumes eight taxes at the Central and nine taxes
at the State level.38
7. The Employee State Insurance
Corporation (ESIC) has developed a fully online module for electronic return
filing with online payment. This has substantially reduced the time to prepare
and file returns.
8. With the introduction of the
e-verification system, there remains no physical touch point for document
submission to income tax authorities.
MEASURES UNDERWAY
1. Paying Taxes: GST implementation.38
2. Resolving Insolvency: Increased
usage of Fast-track Corporate Insolvency Resolution Process (CIRP) as more
insolvent companies opt for reorganization plans instead of liquidation.39
3. Enforcing Contracts: The faster
resolution of commercial disputes through dedicated commercial courts.40
Registering Property: Digitization of land records and maps will bring
transparency on encumbrances and ease the process of registering property.
STATE REFORMS FROM INDIAN GOVERNMENT
1. DPIIT has launched the latest
Business Reform Action Plan for the year 2020 (BRAP 2019-20). It consists of
301 reform points across 15 areas. The highlights of State Reforms Action Plan
2020 are
• ‘Investment enablers’ - To
incorporate reforms related to ‘Access to information and transparency’,
‘Online Single Window System And more.
• Single Window system- To enable the single window system including
online submission of application, payment of application fee and many more
• Sectoral reforms pertaining to
sectors like Tourism, Telecom, Hospitality, Trade License, Healthcare, Legal
Metrology, Cinema Halls and Movie shooting.
• Public procurement has been
introduced first time by Industries department in this year’s Action Plan.
• Reforms related to ‘elimination of
the requirements of renewals of certificates/ approvals/ licenses’ and
‘implementation of computerized central random inspection system’.
2. For BRAP 2018-19, DPIIT has
proposed to undertake a 100% feedback based assessment. The reform areas
included.42
·
Access to Information and
Transparency Enabler
·
Single window system
·
Land administration and Transfer of
Land and Property
·
Land availability and allotment
·
Environment Registration Enablers
·
Construction Permit Enablers
·
Labour Regulation-Enablers
·
Obtaining Utility Permits
·
Paying Taxes
·
Inspection Enablers
·
Contract Enforcement
·
Sector Specific: Healthcare and
Miscellaneous
3.
BRAP 2017-18 was updated to 372 action points. It included new sectors
such as Healthcare and Hospitality, Central Inspection system, Trade License,
Registration under Legal Metrology, and Registration of Partnership Firms &
Societies. Assessment for BRAP 2017-18 included feedback score which was sought
on 78 reform points from actual users.
4. In 2016, DPIIT released a
340-point BRAP. It included recommendations on 58 regulatory processes and
policies spread across ten reform areas spanning the lifecycle of a typical
business.
5. Department for Promotion of
Industry and Internal Trade (DPIIT) launched Business Reforms Action Plan
(BRAP) and its assessment report in September 2015, capturing the findings of
reforms implemented by States/Union Territories.
Detailed information on ease of
doing business measures implemented by various states is available at
http://eodb.dipp.gov.in.
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